SEC Filings

application of these policies to the varying roles and responsibilities of the executives. Generally, the greater the responsibility of the executive and the greater the potential impact of the executive on revenue and net income growth, the higher the potential compensation that can be earned by the executive. In addition, the compensation committee is aware of the competitive market for executive compensation based upon market data provided by compensation consultants, which reflects a meaningful variation between the chief executive officer and other executive positions for each element of compensation.

Our chief executive officer has the greatest responsibility in managing and driving the performance of our Company. He joined our company in 2000, and has managed our significant growth through a combination of organic initiatives, product and service innovation and over 70 acquisitions of businesses and commercial account portfolios, growing our revenue from $33.0 million in 2000 to over $1.8 billion in 2016. As a result of our compensation committee’s assessment of our chief executive officer’s role and responsibilities within our Company, his nearly 17 years of service to our Company and the competitive market for chief executive officer compensation, there is a significant compensation differential between his compensation levels and those of our other named executive officers.

Components of Compensation

Historically, we have not applied specific formulas to set compensation; however we have sought to benchmark our compensation programs against similarly situated companies. In 2014, the compensation committee engaged a compensation consultant to help benchmark the Company’s payment practices against other companies in our performance-based and industry-based peer groups, as well as the general industry as a whole.

Base salary

Initial base salaries for our executive officers are typically negotiated at arm’s-length at the time of hiring. Base salaries are reviewed annually and adjusted from time to time, taking into account individual responsibilities, individual performance for the year, the experience of the individual, current salary, retention incentives, internal equity and the compensation committee’s evaluation of the competitive market, based on its general market experience. No particular weight is assigned to each factor.

Annual Salaries

Executive

2015 Salary

2016 Salary

Increase

Ronald F. Clarke

$

1,000,000

$

1,000,000

—

Eric R. Dey(1)

$

344,231

$

373,077

7

%

John S. Coughlin(2)

$

372,116

$

398,077

7

%

Charles Freund(3)

$

315,384

$

343,077

8

%

Todd W. House(4)

$

372,116

$

398,077

7

%

___________

(1)

Mr. Dey received a salary increase from $350,000 in 2015 to $375,000 in 2016, resulting in a 7% increase in his base salary.

(2)

Mr. Coughlin received a salary increase from $375,000 in 2015 to $400,000 in 2016, resulting in a 7% increase in his base salary.

(3)

Mr. Freund received a salary increase from $320,000 in 2015 to $345,000 in 2016, resulting in a 8% increase in his base salary.

(4)

Mr. House received a salary increase from $375,000 in 2015 to $400,000 in 2016, resulting in a 7% increase in his base salary.

Annual cash incentive compensation

The primary objectives of our annual cash incentive compensation program are to provide an incentive for superior work, to motivate our employees toward even higher achievement and business results, to tie our employees’ goals to Company performance and to enable us to attract and retain highly qualified individuals. The annual cash incentive program is intended to compensate our executive officers for achieving company-wide or individual or business unit performance goals that are important to our success during the fiscal year. Certain goals, which tie directly to our operating budget, we believe, are attainable with good performance. Other goals, which we refer to as “stretch targets”, are considered far more difficult to achieve and in general require extraordinary performance to attain.

Our compensation committee approves all targets and payouts, in consultation with our chief executive officer. Executives are eligible for payments only if they are employed by us both on the last day of the applicable fiscal year and on the actual payment date of the incentive award, except as stipulated by employment agreements.

In January 2016, the compensation committee approved our 2016 annual cash incentive program for our executive officers employed at that time. The annual cash incentive program was intended to compensate our executives for the achievement of both our annual financial goals and individual or business unit performance objectives, as outlined below, and was structured to result in significant